The NOC of Libya is a state-owned company that controls Libya's oil and gas production through a number of fully owned subsidiaries and participation in Joint Ventures (JVs). In combination with its subsidiaries, it accounted for around half of the country's oil output as of 2011.[1] Established in 1970, the parent company counted around 700 employees as of 2008. [2] The Corporation oversees all petroleum activities in Libya including oil and gas exploration, drilling and production; refineries operation; petrochemical production; marketing and distribution of petroleum products and petrochemicals.[3]

In 2010, the Energy Intelligence Group included the Libyan NOC at number 25 in their ranking of the Top 100 World Oil Companies[4] As of November 2012 the chairman of the NOC was Nuri Berruien.[5]

History

The NOC was created on the 5 March 1970, replacing the older Libyan General Petroleum Corporation (Lipetco, created by royal decree in 1968.[7] With its creation the headquarters were moved from Benghazi to Tripoli.[8]

Its mandate was to 'endeavour to promote the Libyan economy by undertaking development, management and exploitation of oil resources' and to participate in the 'planning and executing the general oil policy of the state'. Created as part of Colonel Gaddafi's vision for Libya following the overthrow of the monarchy in 1969, it was similar to its predecessor in that it would function under the supervision and control of the Minister of Petroleum. Its first chairman appointed was Salem Mohammed Amesh.

The 1970s was a period of nationalisations in Libya which saw further consolidation of the NOC's power. In 1971 it took over production operations at the Sarir field following the nationalisation of BP's Libyan concession and by 1974, Production Sharing Agreements (PSAs) had been reached with Exxon, Mobil, Compagnie Francaise des Petroles, Elf Aquitaine and Agip, all on a 85/15 basis onshore and an 81/19 basis offshore.[10]

The 1980s was a decade overshadowed by increasingly problematic US-Libya relations following allegations of Libyan support for terrorist activities, resulting in unilateral US sanctions being imposed in 1986. However, the decade was also one of joint venture projects. In order to offset the US sanctions and to offer incentives to other foreign companies, changes were made to the NOC's regulations regarding joint ventures.[11]

In 2006, a few years after sanctions were lifted, US-educated former Libyan Prime Minister Shukri Ghanem became Chairman of the NOC, [12] in which post he oversaw the return to the country of foreign oil companies.[13] In the same year, the National Energy Council (NEC) was formed, composed of Ministers of Industry, Planning, Economy, Finance and Labour, as well as Ghanem and PM-equivalent Al-Mahmoudi. The entity was intended as a consultative body, nevertheless concerns were raised about the potential resulting politicization of the energy sector.[14] In 2008, leaked US diplomatic cables suggested that Ghanem was seeking to tender his resignation as NOC boss, following a request for US $1.2 billion in cash or oil shipments by Muatassim Gaddafi, a son of Muammar Gaddafi who had recently been appointed National Security Advisor.[15] When his continuation in the role was confirmed, there was reportedly relief among foreign investors at the return of a Western-friendly face at the helm of the NOC.[16]

Further leaked cables from 2008, one the other hand, suggested widespread disaffection within the NOC with Ghanem's autocratic style and lack of technical proficiency compared to his predecessor Al-Badri. This in turn caused tensions among international operators and governments over the human capacity limitations at the Corporation as an operating partner.[17] However, Ghanem remained in his post until conflict broke out in 2011, when he announced his defection in June to join the opposition rebels.[18]

The Future of the NOC

There was much debate over the form the NOC would take following the overthrow of Gaddafi's regime in 2011. Reports in September 2011 claimed that a regional power struggle was emerging as Tripoli and Benghazi competed to host the Corporation.[19] Following the 2011 war, workers in the east called for more powers in a region accounting for around 80 percent of the country's oil wealth.

Newly appointed Minister of Oil Abdelbarli al-Arusi proposed splitting the NOC into an upstream exploration and production body based in the capital and a downstream refining and petrochemicals company in Benghazi. But eastern civil groups and worker unions called for the whole body to be relocated to the east. According to a Reuters report, the citizens of this region, starved of revenues during the Gaddafi era, still felt marginalised by Tripoli in post-revolution Libya.

In early 2013 Yussef al-Ghariani, head of the executive committee of the oil and gas workers' union, was working on a proposal which created two bodies, one in charge of gas and another in charge of oil.[20]